Three important money management topics you don’t want to miss!

Being in control of your money is a powerful thing.

Michigan State University Extension took a look at the most important personal finance topics in a recent study. Among the 13 listed were planning for retirement (84.3 percent), saving and investing (79.3 percent), and managing debt and credit (78.7 percent).

These findings come from a recent study - Personal Finance “Hot Topics”: A Comparison between Educators and Non-Educators. M. Fahzy Abdul-Rahman, New Mexico State University; Megan O’Neil, University of Maryland and Barbara O’Neill, Rutgers Cooperative Extension conducted the study. The researchers found that when they compared those who were teaching financial education and those who did not teach it, the “planning for retirement” and “saving and investment” items were the top two most-frequently selected topics with no statistical difference between the teaching and non-teaching groups. This means that most consumers believe it’s important to have skills in these three money management areas.

One unique detail that was revealed by the study was that it appears that financial educators believe that “talking about money with family” is critical while those who didn’t teach financial education didn’t find it that important. The teaching group had a 63.6 percent selection percentage compared to 37.0 percent for the non-teaching group.

Older adult audiences had a different perspective. Among the 13 money management topics listed, the top items selected for the older adult category were preparing wills and trusts (86.9 percent); managing retirement income and savings (85.4 percent); long-term care (80.3 percent); financing healthcare expenses (79.0 percent); and scams, frauds and identity theft (74.7 percent).

A few of the important implications of this study include:

  • Assistance needs to be provided to do-it-yourself’ers: The study revealed that about three-fourths of respondents selected “self-studied” (76.7 percent), “newspapers/magazines” (75.7 percent) and “Internet sources” (74.1 percent) as their primary sources of personal finance information, teaching methods should include online resources and use social media to market these resources. Educators should incorporate “do-it-yourself” resources, such as free online courses, worksheets, calculators, resource guides and financial planning activities into their programs.
  • Educators will be more effective if they focus on audience needs: In designing personal finance educational programs, educators need to keep the target audience in mind for both preferred topics of interest and information delivery preferences (NEFE 2006; O’Neill et al. 2000; Lyons and Hunt 2003). Specifically, programs and materials need to be “personalized, engaging, attainable, reinforcing, and relevant” (Gurney 2006). People may also need to be shown that they overrate themselves in personal finance because they don’t know what they don’t know.
  • Consumers may want to consider if they have false confidence: Almost three-quarters (73.4 percent) of non-educators considered themselves highly financially knowledgeable. This could mean they are financially capable or simply overconfident. Their most frequently reported “Always” information source was family members, who may not be knowledgeable in personal finance. Stratified results showed that Cooperative Extension resources were not popular among consumers, an indication of a need to improve Extension marketing and outreach efforts.

The bottom line: This study supports the importance of financial educators listening to learners and addressing their content interests and learning method preferences.

Michigan State University Extension assists individuals, households, organizations and communities to become sustainable through money management workshops and other education related to financial capability, home pre-purchase education and foreclosure intervention.

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